uTrade V2 Fee Structure
85–10–5–0 Means Liquidity Providers and UNFI Super Pairs Win Big!
- For most preferred uTrade V2 pairs, the fee structure can be generalized as 85–10–5–0.
- About 85% of the trading fees goes to liquidity providers in that pair.
- About 10% of the trading fees are awarded to the UNFI Super Pair on that blockchain. Only UNFI token holders have access to this massive bonus reward.
- About 5% of trading fees are used to increase the UP redeem value on that blockchain.
- Exactly 0% of any trading fees on the entire uTrade V2 platform go to the Unifi Team. Now that is a community-first approach!
- uTrade V2 features Uniswap compatible contract calls, even for fee information!
- Special trading pairs, or pairs with lower volume may have different fee structures.
uTrade V2 new fee structure goals
uTrade V1’s fee structure did not provide the flexibility to allow uTrade to become the most rewarding AMM out there. V2’s fee structure removes V1 restrictions and sets up uTrade V2 to be a major player in the DeFi landscape. This new fee structure was established with 3 main goals in mind.
Goal #1 Make uTrade the most rewarding AMM
Building on the unique advantages of the UP liquidity rewards token, V2 has a fee structure that makes uTrade the most rewarding platform to use for all types of trading pairs. Having the best rewards incentivizes liquidity providers and developers looking to build the next generation of DeFi tools.
Goal #2 Establish UNFI governance of fee structures
UNFI is the governance token for the multi-chain Unifi Protocol. Projects and token holders on any Unifi blockchain can appeal to UNFI governance to improve their particular fee structure to best fit the needs of their project. This also incentivizes projects to become UNFI holders so they can participate in the governance process. This is another step in establishing UNFI governance control on all Unifi Protocol blockchains.
Goal #3 Provide UNFI exclusive multi-chain rewards
uTrade V2 has created a new fee structure that establishes the UNFI governance token as the center of the multi-chain Unifi Protocol ecosystem. UNFI Super Pairs exist on each blockchain and provide exclusive trading fee rewards to UNFI holders.
Several variables allow uTrade to create customized fee structures. These structures allow each type of trading pair to be the most rewarding pair of its type among other AMM platforms. While this may sound complex, it can be generalized and simplified down to one easy to remember set of numbers, 85–10–5–0.
In short, 85–10–5–0 is an approximate average of the trading fee split for trading pairs on the entire multi-chain uTrade platform. 85–10–5–0 is a generalization to allow for ease of communication. The actual averages for each blockchain can vary over time depending on factors such as volume, quantity, and type of pairs currently being traded.
If you’re ever wondering what kinds of rewards uTrade V2 users earn, just remember 85–10–5–0. It just rolls off the tongue. Eighty-five ten five zero.
Go ahead and try saying it out loud! It is easy to remember.
What does 85–10–5–0 mean?
About 85% of the trading fees from a pair goes to liquidity providers in that pair.
About 10% of the trading fees from all preferred pairs is awarded to the UNFI Super Pair on that blockchain
About 5% of trading fees from all preferred pairs is used to increase the UP redeem value on that blockchain
Exactly 0% of any trading fees on all preferred pairs go to the Unifi Team.
A ‘preferred pair’ is any pair that mints UP. For anyone who wants exact percentages on a specific trading pair, that is available right on the platform’s liquidity page. Anyone building on uTrade can source accurate and instant information on fees for each pair using the information in our developer documentation. This is also a good source for the trading fee formula and related technical data.
Why is it important to split trading fees 85–10–5–0?
85% for liquidity providers
Liquidity providers are critical to the success of Unifi Protocol. In recognition of this, uTrade set the liquidity providers fee share at an approximate average of 85%. With this number as a guide, uTrade will be offering higher rewards to liquidity providers than other currently popular AMMs. 85% rewards to LPs also means most developers, aggregators, and compounding style projects will see better results integrating their project with uTrade than with other AMMs. Compare uTrade’s model of 85% of fees to liquidity providers with the rewards offered by other platforms out there. We are confident you will want to move your liquidity into uTrade V2.
10% For the UNFI Super Pair
UNFI is the Global Governance Token for the entire multi-chain Unifi Protocol Ecosystem. UNFI will govern uTrade on each blockchain as well as all of the other Unifi Protocol products currently under development. All preferred uTrade V2 pairs will contribute an approximate average of 10% of the overall trading fees to the UNFI Super Pair on that blockchain.
5% for the UP redeem value
UP is the utility token of the Unifi Ecosystem. Rewarding liquidity providers in UP allows for larger rewards and specialized features not accessible on other AMMs. The rising redeem value of UP is one of those features and it will receive an approximate average of 5% of the trading fees from preferred trading pairs on that blockchain.
0% to the Team
Unifi was developed by a team focused on finding community centered approaches to blockchain projects. When the community benefits, so does the team, and so does Unifi Protocol! 100% of the trading fee is used to reward participants in the Unifi Protocol ecosystem.
Some pairs are special
Each uTrade pair will have a custom fee structure. This structure includes variables which can be different on individual pairs. As an example, trading fees in the UNFI Super Pair do not contribute to UNFI Super Pair rewards. This is because those fees already go to the liquidity providers in the Super Pair. Other pools may contribute different amounts to the liquidity providers of the UNFI Super Pair depending on actions of the UNFI Global Governance Model, or the pairs performance. Some pairs may also have differing fees to ensure uTrade is offering a market competitive reward rate for liquidity providers.
Some user created pairs will not mint UP
uTrade V2 allows anyone to make new trading pairs. This could include creating pairs of tokens that have no base token pairings. These types of pairs will not be eligible to mint UP until after a pairing exists that includes the base token.
Each project will be incentivized by the default pair creation fee structure to create pairing that will allow their token to mint UP. Once a base token pairing is created, the pair must be reviewed by Unifi to connect the pair to UP minting. UP minting will always be desirable to projects since it is required in order to gain improved trading fee structures and become a preferred pair. Projects and liquidity providers are incentivized to increase liquidity and create volume before requesting a Trading Fee Review from UNFI governance. Details on submitting a Trading Fee Review referendum for consideration by UNFI governance will be released soon.
Pairs that do not mint UP charge a trading fee in one of trading tokens. This fee is rewarded to liquidity providers in the form of the tokens in that pool. A portion of this fee is also shared with uTrade.
Token origination events can also have custom structures
uTrade V2 allows for token sale events that benefit the community as well as the project hosting the event. The custom trading fee parameters allow projects to have a higher fee recovery, while also gaining the benefits of UP token based liquidity rewards. Projects interested in hosting token origination events on uTrade V2 should email firstname.lastname@example.org to inquire about custom smart contracts.
Unifi Protocol and uTrade can be found at https://www.unifiprotocol.com.
Stake UNFI, earn rewards, and be part of the Global Unifi Protocol DAO governance. https://gov.unifiprotocol.com/my-dashboard.
For additional information on forming partnerships, developing on the Unifi Protocol, or using Unifi Protocol to support your project’s goals, email us! email@example.com
Communications from Unifi are subject to Unifi’s standard terms and conditions, which can be found here.